Common use of Eligible Individual Clause in Contracts

Eligible Individual. In order to open an account and to receive the tax benefits afforded an Account Owner you must be an Eligible Individual. If the Account Owner ceases to be an Eligible Individual, beginning on the first day of the Account Owner’s first taxable year for which the Account Owner does not satisfy the definition of an Eligible Individual, additional contributions to the Account Owner’s account will not be accepted by the Plan. Additionally, during the time the Account Owner is not an Eligible Individual, none of the Account Owner’s expenses will be considered Qualified Disability Expenses. If the Account Owner subsequently re-qualifies as an Eligible Individual, contributions to the Account Owner’s account again may be accepted .......................................................................................................................................................................................................... subject to the applicable Annual Contribution Limit and the Account Balance Limit, and expenses incurred that meet the definition of a Qualified Disability Expense will be Qualified Disability Expenses. The Account Owner or Authorized Individual is responsible for making the required certifications relating to the Account Owner’s eligibility to invest and reporting to the Plan when the Account Owner is no longer eligible. See “Part 1 – Overview” for more information. One account rule – The proposed Treasury regulations provide that except with respect to Rollovers, no Account Owner may have more than one ABLE account in existence at the same time. A prior ABLE account that has been closed does not prohibit the subsequent creation of another ABLE account for the same Account Owner. The proposed Treasury regulations provide that, in the event any ABLE account is opened for an Account Owner with an ABLE account already in existence, only the first such account created for that Account Owner qualifies as an ABLE account. If more than one ABLE account is opened by an Account Owner, the subsequent ABLE account(s) will not be treated as ABLE accounts under the ABLE Act and will not be eligible for the benefits of ABLE accounts. For example, monies contributed to a second or subsequent ABLE account will not be disregarded for determining eligibility under federal means-tested programs, such as SSI, and could result in the imposition of federal taxes and penalties. The proposed Treasury regulations also provide, however, that a return, in accordance with the rules that apply to returns of Excess Contributions of the entire balance of a second or other subsequent account received by the contributor(s) on or before the due date (including extensions) for filing the Account Owner’s income tax return for the year in which the account was opened and contributions to the second or subsequent account were made will not be treated as a gift or distribution to the Account Owner for purposes of Code Section 529A. If the Excess Contributions are returned within the time periods specified Federal and state tax considerations above, any net income distributed is includible in the gross income of the contributor(s) in the taxable year in which the Excess Contribution was made. Federal tax advantages – Contributions to a qualified ABLE program are not deductible for federal income tax purposes. There are two primary federal income tax advantages to investing in a qualified ABLE program. First, investment earnings on the money you invest in the Plan will not be subject to federal income tax until they are distributed. Second, the investment earnings distributed as part of a Qualified Withdrawal, are free from federal income tax.

Eligible Individual. In order to open an account and to receive the tax benefits afforded an Account Owner you must be an Eligible Individual. If the Account Owner ceases to be an Eligible Individual, beginning on the first day of the Account Owner’s first taxable year for which the Account Owner does not satisfy the definition of an Eligible Individual, additional contributions to the Account Owner’s account will not be accepted by the Plan. Additionally, during the time the Account Owner is not an Eligible Individual, none of the Account Owner’s expenses will be considered Qualified Disability Expenses. If the Account Owner subsequently re-qualifies as an Eligible Individual, contributions to the Account Owner’s account again may be accepted .......................................................................................................................................................................................................... ............................................................................................................................................................................................................ Federal and state tax considerations subject to the applicable Annual Contribution Limit and the Account Balance Limit, and expenses incurred that meet the definition of a Qualified Disability Expense will be Qualified Disability Expenses. The Account Owner or Authorized Individual is responsible for making the required certifications relating to the Account Owner’s eligibility to invest and reporting to the Plan when the Account Owner is no longer eligible. See “Part 1 – Overview” for more information. One account rule – The proposed U.S. Treasury regulations provide that except with respect to Rollovers, no Account Owner may have more than one ABLE account in existence at the same time. A prior ABLE account that has been closed does not prohibit the subsequent creation of another ABLE account for the same Account Owner. The proposed U.S. Treasury regulations provide that, in the event any ABLE account is opened for an Account Owner with an ABLE account already in existence, only the first such account created for that Account Owner qualifies as an ABLE account. If more than one ABLE account is opened by an Account Owner, the subsequent ABLE account(s) will not be treated as ABLE accounts under the ABLE Act and will not be eligible for the benefits of ABLE accounts. For example, monies contributed to a second or subsequent ABLE account will not be disregarded for determining eligibility under federal means-tested programs, such as SSI, and could result in the imposition of federal taxes and penalties. The proposed U.S. Treasury regulations also provide, however, that a return, in accordance with the rules that apply to returns of Excess Contributions of the entire balance of a second or other subsequent account received by the contributor(s) on or before the due date (including extensions) for filing the Account Owner’s income tax return for the year in which the account was opened and contributions to the second or subsequent account were made will not be treated as a gift or distribution to the Account Owner for purposes of Code Section 529A. If the Excess Contributions are returned within the time periods specified Federal and state tax considerations above, any net income distributed is includible in the gross income of the contributor(s) in the taxable year in which the Excess Contribution was made. Federal tax advantages – Contributions to a qualified ABLE program are not deductible for federal income tax purposes. There are two primary federal income tax advantages to investing in a qualified ABLE program. First, investment earnings on the money you invest in the Plan will not be subject to federal income tax until they are distributed. Second, the investment earnings distributed as part of a Qualified Withdrawal, are free from federal income tax. Withdrawals – The treatment of a withdrawal from an account will vary depending on whether the withdrawal is a Qualified Withdrawal, Rollover, or a Non-Qualified Withdrawal. Whether a withdrawal is a Qualified Withdrawal, Rollover, or a Non-Qualified Withdrawal is a matter between the Account Owner and the IRS. The Plan assumes no responsibility for monitoring the Account Owner’s compliance with applicable tax rules.